The IPO Buzz: Money, Sex and Security

Thunder and lightning are expected to roll off of this week’s calendar, but a lot can happen before the show begins. The IPO weather forecaster has identified three pending storms. They are called Square (SQ – proposed), Match Group (MTCH – proposed) and Mimecast (MIME – proposed). Two of those names are marquee quality, while the third is one with a definite following in corporate IT circles.

These companies represent sectors with wide appeal: Money, in the case of Square; sex, or at least the chance of a dinner date and possibly more, in the case of Match, and security, or specifically anti-hacking protection for corporate email, in the case of Mimecast.

Hip and Square

Any business “from cabs to coffee shops, lawyers to landscapers, retail stores to restaurants” can accept payment by credit card on a mobile device, thanks to Square, which was started in February 2009, according to the company’s prospectus. For fans of classic rock, the company’s name might remind them of “Hip To Be Square,” a 1986 hit for Huey Lewis and the News.

Square is a San Francisco-based provider of mobile payment solutions. Bankers plan to price 27 million shares at $11 to $13 each Wednesday evening to trade Thursday morning on the New York Stock Exchange.

The Buzz: Square is a brand name. The company reported revenue of slightly over $1 billion for the 12-month period ended Sept. 30, 2015. It is getting swamped by the financial media, mostly negative press. Just the same, the IPO players are said to be lining up to get stock in the offering – and individual investors can get in on the action, too. That’s right, Joe Six-Pack and Jane Zinfandel are welcome.

Note: The last banker’s name to appear on the cover of the Square prospectus is LOYAL3. That is significant to individual investors. According to Square’s prospectus, up to 5 percent of the IPO – or 1.35 million shares – will be made available to individuals. It states: “Individuals can elect to purchase shares in our IPO through LOYAL3 in amounts starting at $100, with no transaction fees.” That’s right, Joe Six-Pack and Jane Zinfandel are welcome.

Sex Sells

The matchmakers of yesteryear could not have imagined that in the 21st Century, people might find their ideal mates with the help of the Internet, their smartphones and some algorithms. That’s where the Match Group – one of the marquee names on this week’s IPO calendar – comes in.

Match Group is a Dallas-based provider of online dating products. The company operates over 45 brands, including Match, OkCupid, Tinder, Meetic, Twoo, OurTime, BlackPeopleMeet and FriendScout24. Match Group offers dating products in 38 languages across more than 190 countries, and has about 59 million MAU (monthly active users)and about 4.7 million paid members. Bankers plan to price 33.3 million shares at $12 to $14 each Wednesday evening to trade Thursday morning on the NASDAQ Global Select Market.

The Buzz: Match Group is a brand name. And it’s profitable: Match reported net income of $133.1 million on revenue of $991.9 million in the 12-month period ended Sept. 30, 2015. Yes, indeed, sex sells.

Encrypted Email and the Cloud

As hackers get more sophisticated and more corporate email lives in the cloud, demand has exploded for encrypted email and other security services. Mimecast says its mission “is making email safer for business,” according to its website.

Mimecast is a London-based provider of cloud security and risk- management services for corporate information and email. The company provides services to about 15,200 customers worldwide. Bankers plan to price 7.75 million shares at $12 to $14 each Wednesday evening to trade Thursday morning on the NASDAQ Global Select Market.

The Buzz: Mimecast is a cloud-based anti-hacking email service provider. It’s profitable. Mimecast reported net income of $7.6 million on revenue of $128.4 million in the 12-month period ended Sept. 30, 2015. And it competes in a hot industrial sector.

A Billion-Plus Lineup

This week’s calendar has a total of eight IPOs expecting to raise over $1.5 billion. Beyond Square, Match and Mimecast, let’s take a look at the other companies set to go public.

Also in the running:

Axsome Therapeutics (AXSM – proposed) is a New York City–based clinical stage biopharmaceutical company developing therapies for the management of pain, chronic depression, neurological conditions and other central nervous system disorders.

Duluth Holdings (DLTH – proposed) is a Belleville, Wisconsin- based company operating under the name of Duluth Trading. It provides a lifestyle brand of men’s and women’s casual wear, workwear and accessories sold exclusively through its own outlets. The company offers durable and functional products, such as Longtail T-shirts, Buck Naked underwear and Fire Hose work pant.

(Note: For more information on each of the above, please click through to IPOScoop.com’s Website to get general information, contact information, including prospectus, financials information and IPO profile.)

At press time, next week’s calendar has no IPOs, and the week is broken up by the traditional Thanksgiving Day holiday. But it is early – and anything can happen.

Stay tuned.

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Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.

Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.